Jewelry Business Insight

Top 10 mistakes people make when pricing repairs

Top 10 mistakes people make when pricing repairs
  1. Thinking of repairs as being price-sensitive similar to the way jewelry products are. Customers come to you because they trust you. Want proof? Answer this simple question: Out of 10 people who look in the case, how many buy? (Average is two or three out of 10). Out of 10 people who ask if you can repair something, how many leave it? (Average is nine out of 10). There you go! It’s not price-sensitive.
  2. Making the price up in mid-air and speaking it orally. That will run you about $45. Bad news, the customer might say, “Gosh, that sounds like a lot, can’t you do better?” Okay, if you hold your ground, fine. But what if you lower the price? Know what that means? The jeweler has to either work faster or clock out while doing the job because you’ve lowered the price. The shop can’t make money this way. Your second problem is: it’s coming out of your mouth. Basic psychology: People are apprehensive about what they hear, and believe what they see. Have all prices written down so you can refer to the particular repair they request. Our 300-page price book got us to the level where when we pointed and said, “$85.00”, they just said, “Okay.”
  3. Not having bi-monthly sales meetings where you train the staff a little at a time on how repairs are actually priced. Lessons over time go a long way towards having a terrific staff. We spent nine months training our staff. Start today.
  4. Asking your jeweler, “How much should we charge?” Ever notice how a jeweler calls home and says, “Honey, I’ll be about 45 minutes late ...” and he shows up two hours later? Jewelers can’t judge time well. So how can we expect them to be able to price well? The solution is simple: ask the jeweler how long he thinks it will take, double that amount and multiply that new number by at least $65 per hour. Our shop figured its time at $100 per hour, but we used a longer timeframe for the time multiplier. Also, most bench jewelers can’t imagine getting $100 for what “just took them an hour”.
  5. Calling the customer back later with an estimate. Whether it’s a repair or a custom job, there’s no real reason why you can’t price it now. Besides, the customer will lose their enthusiasm ... so strike while the iron is hot. And stop wasting your time and theirs. Quote now.
  6. Prejudging that a customer won’t pay for a repair because you’re worried that they will think the price is way more than the item is worth. It is not your place to decide if a customer won’t spend the money. Don’t go and charge $45 for fixing a cheap ring just because it’s cheap, if it will take the 1.5 hours you would normally charge $150 for. If you charge $150 to fix an $800 ring, but only $45 to fix a $200 ring, then logically you should charge $400 for the same 1.5 hours on a $4,000 ring. You may like the idea of charging more on higher items to make up for lower priced repairs. But charge consistently, you’ll come out better.
  7. Not offering what the item really needs because you think, you’ve “charged enough” already. I know one store in California where they simply won’t answer the simple question, “How much to size my ring down?” Instead they’ll take the ring to the microscope and write down what it needs. About 90 percent of their customers follow the objective advice. Their average repair is $95.
  8. Not paying commissions on repairs. This is one of the silliest of all! It takes one person to sell a $2,000 showcase item in 15 to 30 minutes. It takes four people to sell a $25 repair in the same amount of time! It takes a salesperson to sell it, someone to log it in and order a part, a jeweler to fix it and a salesperson to deliver it. Four people for $25! I wouldn’t like repairs either if I wasn’t compensated for selling them. Besides, if the jeweler cost you $3 and you received $10 to do the job, isn’t that profitable?
  9. Not telling the customer about your warranty. Believe it or not, you have warranted your workmanship, even though you didn’t speak the words. Tell the customer you warranty your work; it will help you get those higher prices more easily.
  10. Not offering your customers rush service. Customers want the convenience of while-you-wait or fast service. In our price book you’ll find an “Express Service” column. It’s 50 percent higher and we’ll do any repair while you wait or within 24 hours. About 40 percent of the customers take us up on it! And this particular service generates the least complaints!

You can make more gross profit dollars as a percentage from the shop than you can from the case. Customers will pay for convenience, quality and trust.

David Geller - JewelerProfit | April 3rd, 2013
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